I think you are right, except that an employer could argue that since an illegal would not be eligible for workers comp, he certainly shouldn't be able to milk the system with a tort claim. Regardless, I don't think workers comp can be seen as some sort of benefit paid for by the state. Employers have to have workers comp insurance as part of the cost of doing business. If illegals aren't covered by the insurance, then it's even cheaper for an employer to hire them. At that point, any costs get born by medical providers which in turn the government(either state or federal) will pay for or we will in the form of higher medical costs. Either way, this bill is silly and will only encourage the hiring of more illegals.
As mentioned by another poster, the public policy behind WC is to cover worker injuries, regardless of fault, without bankrupting employers through negligence suits. Usually an employee cannot sue for job injuriy unless the employer committed some intentional act.
In NJ, the law is that illegals do qualify for WC and no SS # is necessary. The reason is to make sure all workers are covered for job injury and do not have to rely on the state for treatment. Should an employer not have WC insurance, then the illegal goes to the hospital where taxpayers pick up the tab.
In NJ, if an employer does not have WC insurance, then the state picks up the cost of WC treatment, but the benefit is somewhat less generous. The state would then go after the employer for the costs. So negligence suits for workplace injury are not really an issue in NJ, unless there is some intentional act on the part of the employer that causes the employees injury. Illegals are allowed to sue in tort in NJ.